Fabric business creditors set to suffer £14m shortfall

Historic silk fabric business Vanners owed unsecured creditors over £16m ahead of entering administration.

James Lumb and Chris Pole, both from KPMG Restructuring, were appointed as joint administrators of Silk Industries Limited, trading as Vanners, on 9 November 2020.

Detailed in recent documents filed on Companies House, Vanners owed unsecured creditors a total of £16.6m, with the majority of £15.3m owed to its pension fund.

Other creditors included the HMRC, owed over £180,000, 82 employee claims valuing a combined figure of £691,000 and almost £430,000 owed to trade claims.

The report anticipates £2.4m to be realised and made available to unsecured creditors, resulting at a shortfall of £14.1m.

Upon entering administration, 32 staff were made redundant, while the remaining 32 have stayed as the administrators seek a buyer for the business.

Administrators said that the business, which was planning to relocate from Gregory Mills to a new purpose-built premises and turned over between £5-£6m last year, suffered “difficulties” arising from the coronavirus crisis, resulting in a loss of around 70% of its business.

The Suffolk-based company, which has been established since the late 1800s, specialised in silk fabrics and products for fashion and furnishing markets.

James Lumb, Joint Administrator and Director at KPMG, said at the time of the administration: “Vanners had been experiencing difficult trading conditions for some time, which was exacerbated by the severe impact of COVID-19 on the fashion sector. After an exploration of additional investment options proved unsuccessful, the directors took the difficult decision to place the company into administration.

“We intend to fulfil outstanding orders while we seek a buyer for the business, and would encourage any parties who may be interested to contact us as soon as possible.

“We will also be providing support to those members of staff who have been made redundant, assisting them in making claims to the Redundancy Payments Office.”